Aiken, S.C.-based Security Federal Corp. on Oct. 31, 2016, repurchased all 22,000 shares of its series B fixed-rate cumulative perpetual preferred stock from the U.S. Treasury Department for $21.4 million.
The total payment comprised a repurchase amount of $21.3 million plus accrued interest of $93,000. As a result of the transaction, the company recorded $660,000 in its 2016 net income available to common shareholders. In addition, the company replaced the preferred stock with a low-cost loan. The company expects to record after-tax savings of $180,000 in 2017.
Security Federal financed the transaction through a $14.0 million term loan and cash on hand.
The company's fourth-quarter 2016 net income available to common shareholders was $1.4 million, or 46 cents per share, compared to $1.2 million, or 40 cents per share, in the year-ago period. The press release also said 2016 net income available to common shareholders was $6.2 million, or $1.99 per share, compared to $5.7 million, or $1.84 per share, in 2015.